New York Backs $15 Minimum Wage for Fast Food Workers: What Will That Mean in the Long Run?

Staff Writer
A New York panel is officially recommending a $15 minimum wage for fast food workers, and that would go into effect by 2018

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What will this mean for the future of New York City’s economy?

New York is now one step closer to implementing a $15 minimum wage for fast food workers. The fast food labor wages board, appointed by Gov. Andrew Cuomo, officially recommended a $6.25 increase for thousands of fast food workers across the state. If New York State’s labor commissioner approves the proposal, then the minimum wage will reach $15 per hour for New York City fast food workers by the end of 2018 (and by 2021 for the rest of the state). The law would mimic similar minimum wage bills that were recently passed in Seattle and Los Angeles.

Raising the wages of fast food workers by $6.25 over the next three years is a significant change, and economic experts predict that it will have a massive impact on the state’s economy. Restaurant owners are already speculating that they will have to raise prices and cut back staff to survive the shift.

"Are people underpaid? Probably,” New York-area Dunkin Donuts franchise owner Tom Burke told Biz Journals.But is the hotel maid any less deserving of $15 an hour?"

Economic analysts predict that other non-fast food minimum wage employers, like clothing stores, convenience stores, and upscale restaurants, will feel the pressure to raise wages just to compete.

“It would be very attractive for somebody working at the Gap, making around $9 an hour, to look across the street and see Chipotle paying $2 or $3 or $4 more and decide that they would rather work at Chipotle,” Irene Tung, a policy researcher for the National Employment Law Project, told The New York Times.

Seattle has been feeling the effects of the $15 minimum wage since the city passed the law in June 2014. Although the long-term impacts of the new minimum wage are unclear, since the law just went into effect this spring, the unemployment rate has been on a downward trend since the $15 minimum wage was passed. Since January, the unemployment rate has fallen from 4.9 percent to 3.8 percent in June, according to the Bureau of Labor Statistics, echoing the larger nationwide overall employment rate, according to Forbes.  However, the weeks leading up to April 1, 2015, the beginning of the implementation period in Seattle, there was a string of restaurant closures, which many attribute to the radical change in employee paychecks. According to NPR, restaurants are cutting back on hours and trimming costs however they can to take on the new expense.

"With the labor pressures that are coming from this $15 eventual minimum-wage increase, we are juggling with razor-sharp daggers," Jeremy Hardy, who owns Seattle’s Coastal Kitchen, told NPR. "And if you don't get it right, it's really going to hurt."

Are we seeing West Coast premonitions of what might happen in New York? It’s too soon to tell. But according to New York City comptroller Scott Stringer, city paychecks overall would increase by $1.3 billion.

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